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Capital Relief Trades

Capital relief trades are deals put together by banks to sell on to investors to reduce the bank's regulatory capital requirements. Such deals can take many forms, but SCI focuses on those where synthetic or securitisation structures are utilised. Those deals can be broken down into the following broad categories (deals can be combinations of these categories): CDS - credit default swaps: in the capital relief trade context, this denotes deals that utilise such instruments to transfer credit risk. CLN - credit-linked note: in the capital relief trade context, this denotes the deal is structured as a note with an embedded credit derivative. Fin gtee - Financial guarantee: a means of structuring a capital relief trade, whereby the investors benefit from a guarantee that all the issuer's obligations will be met. Funded: where a capital relief trade is understood to have been structured using a credit derivative (CDS, CLN, synthetic CDO etc) with the protection seller making an initial payment. Unfunded: where a capital relief trade is understood to have been structured without an initial payment being made under the credit derivative (CDS, CLN, synthetic CDO etc). True sale: a capital relief trade based on a cash securitisation structure rather than a synthetic securitisation structure.


  • Risk transfer round-up - 28 February

    CRT sector developments and deal news

    Banca Monte dei Paschi di Siena is rumoured to be readying an SME SRT for next month, with the count...

    News    28 February 2020
  • MRT evolution

    US Mortgage Risk Transfer report now available

    Pioneered by Fannie Mae and Freddie Mac the US mortgage risk transfer (MRT) market is growing strong...

    News    27 February 2020
  • UK SRT debuts

    Opel prepping full-stack auto ABS

    BNP Paribas is marketing Opel’s second full-stack auto ABS from the E-CARAT programme. Dub...

    News    25 February 2020
  • High-profile bankers exit SRT

    Sector developments and company hires

    SRT departures Last week saw a couple of high-profile exits from SRT banking teams in London. Struc...

    Market moves    24 February 2020
  • SCI Start the Week - 24 February

    A review of securitisation activity over the past seven days

    REMINDER: SCI NPL Securitisation Awards 2020 Nominations are now open for the inaugural SCI N...

    News    24 February 2020
  • Moving down

    Insurers target first-loss CRTs

    Insurers are now targeting the first-loss tranches of capital relief trades, having eyed the senior...

    News Analysis    21 February 2020
  • SRT fund launched

    AXA engineers return

    AXA Investment Managers has completed its eighth partner capital solutions fund. With the move, the...

    News    21 February 2020
  • Risk transfer round-up - 20 February

    CRT sector developments and deal news

    Further details have been revealed of CRT transactions that were completed in 4Q19. One is another B...

    News    20 February 2020
  • SME double

    EIF closes pair of EFSI guarantees

    The EIF has closed two new guarantee agreements supporting European SMEs, both of which are supporte...

    News    19 February 2020
  • SCI Start the Week - 17 February

    A review of securitisation activity over the past seven days

    REMINDER: SCI NPL Securitisation Awards 2020 Nominations have now opened for the inaugural SC...

    News    17 February 2020
  • ArrowMark acquires investment platform

    Sector developments and company hires

    Acquisition ArrowMark Partners has acquired the bank investment platform and assets of StoneCastle...

    Market moves    14 February 2020
  • Risk transfer round-up - 13 February

    CRT sector developments and deal news

    Mediobanca is readying another capital relief trade in addition to its inaugural SRT that will close...

    News    13 February 2020
  • Risk transfer boost

    CRT issuance breaks record

    Capital relief trade issuance broke a record in 2019, with volumes reaching €7.5bn. This ma...

    News Analysis    13 February 2020
  • CRT upgraded due to 'substantial' increase in CE

    Sector developments and company hires

    Canadian MBS ETF BMO Asset Management has launched a new stable of ETFs trading on the TSX, inclu...

    Market moves    12 February 2020
  • SCI Start the Week - 10 February

    A review of securitisation activity over the past seven days

    SCI NPL Securitisation Awards 2020 Nominations have now opened for the inaugural SCI NPL Securitisa...

    News    10 February 2020
  • Sporadic issuance

    CQS SRT wave unlikely

    BNP Paribas arranged Amalia, Banca Nazionale del Lavoro’s landmark synthetic securitisatio...

    News Analysis    10 February 2020
  • EBA reports pending

    Trapped excess spread requirement could be dropped

    The EBA will finalise its approach to significant risk transfer this year through the publication of...

    News Analysis    7 February 2020
  • Risk transfer round-up - 7 February

    CRT sector developments and deal news

    Bank of Scotland (BOS) is in the market with Syon Securities 2020, its second UK mortgage SRT (SCI 2...

    News    7 February 2020
  • Syon Securities priced

    Bank of Scotland engineers return

    Bank of Scotland has priced a seven-year financial guarantee that references a £550m portf...

    News    7 February 2020
  • SCI Start the Week - 3 February

    A review of securitisation activity over the past seven days

    Transaction of the week Goldman Sachs has completed an unusual catastrophe bond that covers the tai...

    News    3 February 2020
  • Grasshopper up

    Landmark green SRT finalised

    RBS has completed a landmark capital relief trade referencing a £1.1bn portfolio of UK pro...

    News Analysis    31 January 2020